Dominion has closed the sale of its Canadian natural gas and oil exploration and production (E&P) operations to Canadian-based Paramount Energy Trust and Baytex Energy Trust.
The Canadian operations were sold to the trusts in May (see Daily GPI, May 30). The closing price was US$624 million, based on currency exchange rates on Monday. At the end of 2006, the Western Canada operations included 267 Bcfe of proved natural gas and oil reserves, with average production of 60 MMcfe/d.
Dominion is in the process of selling almost all of its E&P operations as it refocuses on the power generation and energy distribution, transmission, storage and retail businesses. In early June, Dominion made a deal to sell nearly all of its U.S. onshore E&P properties in a two-way transaction with Loews Corp. and XTO Energy Corp. for $6.5 billion (see Daily GPI, June 5). In late April, the company sold its offshore E&P business to a subsidiary of Italy’s Eni SpA for $4.76 billion (see Daily GPI, May 1).
Only Dominion’s Midcontinent properties remain to be sold, and that process is expected to begin in July and be completed by the end of the year. The Midcontinent operations, located primarily in Oklahoma, had proved, probable and possible reserves of 780 Bcfe, 435 Bcfe and 966 Bcfe, respectively, with average daily production of 120 MMcfe in 2006.
Dominion plans to retain its Appalachian Basin operations, which include 1 Tcfe of proved reserves. The operations are considered lower-risk and a strategic fit with the company’s gas gathering, pipeline and storage systems.
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